Pivotal Research Group senior analyst Brian Wieser has
downgraded Google stock from "buy" to "hold," while moving
Yahoo in the other direction, upgrading that stock to "buy."
In a note to investors Thursday, Wieser said the Google
downgrade was due to an "overly positive" response to the company's
second quarter numbers and falling margins as ads migrate to mobile devices
where the margins are usually lower than for laptops and tablets.
He also points to increased content/production/licensing costs
at YouTube. One possible offset to the declining ad margins, he said, could be
Google's decision to not to allow advertisers to only target mobile devices.
With Google having over 90% of paid search spending, not allowing advertisers
to cherry-pick mobile platforms may help decrease the distinction between
mobile and desktop ads.
Among the factors to any predictions for Web publishers, he
says, are new competitors and government regulations and consumer
"pushback" on data management and privacy.
Yahoo gets an upgrade due primarily to gains for Yahoo
Japan, but also the announcement Wednesday that it would allow Google display
ads on its various properties using AdSense and Admob.